One day last summer David Kolata, an obscure researcher for the Citizens Utility Board, was sifting through mounds of boring documents on arcane energy matters when he found records he says suggest that Peoples Gas and Enron engaged in questionable transactions during the winter of 2000-’01. “You always hope you find some decent information when you go through materials,” he says. “But in my wildest dreams I never imagined I’d discover this.”
By the summer of 2002 Kolata was up to his eyebrows in the complicated details of the natural gas price hikes during the long, brutally cold winter of 2000-’01. Gas bills had doubled, and Peoples Gas had cut off service to hundreds of poor and working-class Chicagoans who couldn’t pay their bills. “Peoples took a firm line on what was causing the hike,” says Kolata. “They said it’s not their fault. It’s the market’s fault. It was just a colder than normal winter following a warmer than normal summer, and so that combination led to a shortage of gas. They said it was a result of the law of supply and demand. They had to buy when demand was high, which meant they had to pay higher rates.” And so consumers had to pay too.
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At this point Kolata had spent over two years investigating the matter, but he wasn’t about to quit. “I wanted to take a closer look at the Enron connection,” he says. “I knew there were documents available relating to Enron’s bankruptcy. I wanted to see what I could find that might shed light on the Peoples deal.”
Kolata also found profit-loss statements he claims indicate that “Enron Midwest was sharing profits with Peoples Energy. These were profit-sharing arrangements for which they needed ICC approval–but they didn’t have ICC approval.”
Kolata says that while Patrick’s statements about prudent gas buying and the excess-storage contract are true, they’re beside the point–they don’t address the questions he’s raised about the Enron Midwest gas loans or the profit sharing.
